Case Digest Aliling - Woodridge

August 27, 2017 | Author: twenty19 law | Category: Employment, Independent Contractor, Sailor, Labour Law, Salary
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1. ARMANDO ALILING, petitioner, vs. JOSE B. FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS CORPORATION, respondents. G.R. No. 185829. April 25, 2012. FACTS: Respondent Wide Wide World Express Corporation (WWWEC) offered to employ petitioner Armando Aliling (Aliling) on June 2, 2004 as “Account Executive (Seafreight Sales),” with a compensation package of a monthly salary of PhP 13,000, transportation allowance of PhP 3,000, clothing allowance of PhP 800, cost of living allowance of PhP 500, each payable on a per month basis and a 14 th month pay depending on the profitability and availability of financial resources of the company. The offer came with a six (6)-month probation period condition with this express caveat: “Performance during probationary period shall be made as basis for confirmation to Regular or Permanent Status.” On June 11, 2004, Aliling and WWWEC inked an Employment Contract under the terms of conversion to regular status shall be determined on the basis of work performance; and employment services may, at any time, be terminated for just cause or in accordance with the standards defined at the time of engagement. However, instead of a Seafreight Sale assignment, WWWEC asked Aliling to handle Ground Express (GX), a new company product launched on June 18, 2004 involving domestic cargo forwarding service for Luzon. Marketing this product and finding daily contracts for it formed the core of Aliling’s new assignment. A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales and Marketing Director, emailed Aliling to express dissatisfaction with the latter’s performance.

On September 25, 2004, Joseph R. Lariosa (Lariosa), Human Resources Manager of WWWEC, asked Aliling to report to the Human Resources Department to explain his absence taken without leave from September 20, 2004. Aliling responded two days later. He denied being absent on the days in question, attaching to his reply-letter a copy of his timesheet which showed that he worked from September 20 to 24, 2004. Aliling’s explanation came with a query regarding the withholding of his salary corresponding to September 11 to 25, 2004. On October 15, 2004, Aliling tendered his resignation to San Mateo. While WWWEC took no action on his tender, Aliling nonetheless demanded reinstatement and a written apology, claiming in a subsequent letter dated October 1, 2004 to management that San Mateo had forced him to resign. Lariosa’s response-letter of October 1, 2004, informed Aliling that his case was still in the process of being evaluated. On October 6, 2004, Lariosa again wrote, this time to advise Aliling of the termination of his services effective as of that date owing to his “non-satisfactory performance” during his probationary period. Records show that Aliling, for the period indicated, was paid his outstanding salary. However, or on October 4, 2004, Aliling filed a Complaint for illegal dismissal due to forced resignation, nonpayment of salaries as well as damages with the NLRC against WWWEC. Appended to the complaint was Aliling’s Affidavit dated November 12, 2004, in which he stated: “5. At the time of my engagement, respondents did not make known to me the standards under which I will qualify as a regular employee.” Refuting Aliling’s basic posture, WWWEC stated that in the letter offer and employment contract adverted to, WWWEC and Aliling have signed a letter of appointment on June 11, 2004 containing the terms of engagement.

WWWEC also attached to its Position Paper a memo dated September 20, 2004 in which San Mateo asked Aliling to explain why he should not be terminated for failure to meet the expected job performance, considering that the load factor for the GX Shuttles for the period July to September was only 0.18% as opposed to the allegedly agreed upon load of 80% targeted for August 5, 2004. According to WWWEC, Aliling, instead of explaining himself, simply submitted a resignation letter. On April 25, 2006, the Labor Arbiter issued a decision declaring that the grounds upon which complainant’s dismissal was based did not conform not only the standard but also the compliance required under Article 281 of the Labor Code, Necessarily, complainant’s termination is not justified for failure to comply with the mandate the law requires. Respondents should be ordered to pay salaries corresponding to the unexpired portion of the contract of employment and all other benefits amounting to a total of P35,811.00 covering the period from October 6 to December 7, 2004. The Labor Arbiter explained that Aliling cannot be validly terminated for non-compliance with thw quota threshold absent a prior advisory of the reasonable standards upon which his performance would be evaluated. Both parties appealed the decision to the NLRC, which affirmed the decision of the Labor Arbiter. The separate motions for reconsideration were also denied by the NLRC. The CA anchored its assailed action on the strength of the following premises: (a) respondents failed to prove that Aliling’s dismal performance constituted gross and habitual neglect necessary to justify his dismissal; (b) not having been informed at the time of his engagement of the reasonable standards under which he will qualify as a regular employee, Aliling was deemed to have been hired from day one as a regular employee; and (c) the strained relationship existing between the parties argues against the propriety of reinstatement.

Hence, the instant petition. ISSUE: What is the effect once a decision was assailed for appeal? HELD: It is axiomatic that an appeal, once accepted by this Court, throws the entire case open to review, and that this Court has the authority to review matters not specifically raised or assigned as error by the parties, if their consideration is necessary in arriving at a just resolution of the case. Settled is the rule that the findings of the Labor Arbiter, when affirmed by the NLRC and the Court of Appeals, are binding on the Supreme Court, unless patently erroneous. It is not the function of the Supreme Court to analyze or weigh all over again the evidence already considered in the proceedings below. The jurisdiction of this Court in a petition for review on certiorari is limited to reviewing only errors of law, not of fact, unless the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts. The more recent Peñafrancia Tours and Travel Transport, Inc., v. Sarmiento, 634 SCRA 279 (2010), has reaffirmed the above ruling, to wit: Finally, the CA affirmed the ruling of the NLRC and adopted as its own the latter’s factual findings. Long-established is the doctrine that findings of fact of quasi-judicial bodies are accorded respect, even finality, if supported by substantial evidence. When passed upon and upheld by the CA, they are binding and conclusive upon this Court and will not normally be disturbed. Though this doctrine is not without exceptions, the Court finds that none are applicable to the present case.


A.M. Oreta vs. NLRC G.R. No. 74004

August 10, 1989

FACTS: Private respondent Grulla was engaged by Engineering Construction and Industrial Development Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in Jeddah, Saudi Arabia. The contract of employment, which was entered into June 11, 1980 was for a period of twelve (12) months.

On October 9, 1980, he received a notice of termination of his employment. He filed a complaint for illegal dismissal. Petitioner contends that the respondent Grulla was validly dismissed because the latter was still a probationary employee; and that his dismissal was justified on the basis of his unsatisfactory performance of his job during the probationary period.


Whether respondent Grulla was illegaly terminated by the petitioner?


Yes. A perusal of the employment contract reveals that although the period of employment of respondent Grulla is twelve (12) months, the contract is renewable subject to future agreements of the parties. It is clear from the employment contract that the respondent Grulla was hired by the company as a regular employee and not just mere probationary employee. Also, nowhere in the employment contract executed between petitioner company and respondent Grulla is there a stipulation that the latter shall

undergo a probationary period for three months before he can qualify as a regular employee. Respondent Grulla was not, in any manner, notified of the charges against him before he was outrightly dismissed. Neither was any hearing or investigation conducted by the company to give the respondent a chance to be heard concerning the alleged unsatisfactory performance of his work.

3. G.R. No. 114733 January 2, 1997 AURORA LAND PROJECTS CORP. Doing business under the name "AURORA PLAZA" and TERESITA T. QUAZON, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and HONORIO DAGUI, respondents. FACTS: Private respondent Honorio Dagui was hired by Doña Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential buildings. He was to perform carpentry, plumbing, electrical and masonry work. Upon the death of Doña Aurora Tanjangco in 1982, her daughter, petitioner Teresita Tanjangco Quazon, took over the administration of all the Tanjangco properties. On June 8, 1991, private respondent Dagui received the shock of his life when Mrs. Quazon suddenly told him: "Wala ka nang trabaho mula ngayon," 3 on the alleged ground that his work was unsatisfactory. On August 29, 1991, private respondent, who was then already sixty-two (62) years old, filed a complaint for illegal dismissal with the Labor Arbiter. On May 25, 1992, Labor Arbiter rendered judgment, respondents Aurora Plaza and/or Teresita Tanjangco Quazon are hereby ordered to pay the

complainant the total amount of ONE HUNDRED NINETY FIVE THOUSAND SIX HUNDRED TWENTY FOUR PESOS (P195,624.00) representing complainant's separation pay and the ten (10%) percent attorney's fees within ten (10) days from receipt of this Decision. Aggrieved, petitioners Aurora Land Projects Corporation and Teresita T. Quazon appealed to the National Labor Relations Commission. The Commission affirmed, with modification, the Labor Arbiter's decision in a Resolution promulgated on March 16, 1994, in the following manner: WHEREFORE, in view of the above considerations, let the appealed decision be as it is hereby AFFIRMED with (the) MODIFICATION that complainant must be paid separation pay in the amount of P88,920.00 instead of P177,840.00. The award of attorney's fees is hereby deleted. 5 ISSUES: (1) Whether or not private respondent Honorio Dagui was an employee of petitioners; and (2) If he were, whether or not he was illegally dismissed. RULING: Petitioners insist that private respondent had never been their employee. Since the establishment of Aurora Plaza, Dagui served therein only as a job contractor.. Honorio Dagui earns a measly sum of P180.00 a day (latest salary) and there was no proof adduced by the petitioners to show that Dagui was merely a job contractor, and it is absurd to expect that private respondent, with such humble resources, would have substantial capital or investment in the form of tools, equipment, and machineries, with which to conduct the business of supplying Aurora Plaza with manpower and services for the exclusive purpose of maintaining the apartment houses owned by the petitioners. The bare allegation of petitioners, without more, that private respondent Dagui is a job contractor has been disbelieved by the Labor Arbiter and the NLRC. Dagui, by the findings of both tribunals, was an employee of the petitioners. Dagui was not compensated in terms of profits for his labor or services like an independent contractor. Rather, he was paid on a daily wage basis at the rate of P180.00. Employees are those who are compensated for their labor or services by wages rather than by profits. There are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The jobs assigned to private respondent as maintenance man, carpenter, plumber, electrician and mason were directly related to the business of petitioners as lessors of residential and apartment buildings. Moreover, such a continuing need for his services by herein petitioners is sufficient evidence

of the necessity and indispensability of his services to petitioners' business or trade. Private respondent Dagui should likewise be considered a regular employee by the mere fact that he rendered service for the Tanjangcos for more than one year, that is, beginning 1953 until 1982, under Doña Aurora; and then from 1982 up to June 8, 1991 under the petitioners, for a total of twenty-nine (29) and nine (9) years respectively. Owing to private respondent's length of service, he became a regular employee, by operation of law, one year after he was employed in 1953 and subsequently in 1982. Petitioners argue, however, that even assuming arguendo that private respondent can be considered an employee, he cannot be classified as a regular employee. He was merely a project employee whose services were hired only with respect to a specific job and only while the same exists, thus falling under the exception of Article 280, paragraph 1 of the Labor Code. Hence, it is claimed that he is not entitled to the benefits prayed for and subsequently awarded by the Labor Arbiter as modified by the NLRC. If truly, private respondent was employed as a "project employee," petitioners should have submitted a report of termination to the nearest public employment office everytime his employment is terminated due to completion of each project, as required by Policy Instruction No. 20.Throughout the duration of private respondent's employment as maintenance man, there should have been filed as many reports of termination as there were projects actually finished, if it were true that private respondent was only a project worker. Failure of the petitioners to comply with this simple, but nonetheless compulsory, requirement is proof that Dagui is not a project employee. The second issue as to whether or not private respondent Dagui was illegally dismissed, the SC ruled that indeed the Dagui was illegally dismissed. The twin requirements of notice and hearing constitute the essential elements of due process. This simply means that the employer shall afford the worker ample opportunity to be beard and to defend himself with the assistance of his representative, if he so desires. These mandatory requirements were undeniably absent in the case at bar. Petitioner Quazon dismissed private respondent on June 8, 1991, without giving him any written notice informing the worker herein of the cause for his termination. Neither was there any hearing conducted in order to give Dagui the opportunity to be heard and defend himself. He was simply told: "Wala ka nang trabaho mula ngayon," allegedly because of poor workmanship on a previous job.The undignified manner by which private respondent's services were terminated smacks of absolute denial of the employee's right to due process and betrays petitioner Quazon's utter lack of respect for labor. Such an attitude indeed deserves condemnation. The SC also noted that only an award for separation pay in lieu of reinstatement was made by both the Labor Arbiter and the NLRC. No backwages were awarded. It must be remembered that backwages and reinstatement are two reliefs that should be given to an illegally dismissed

employee. They are separate and distinct from each other. In the event that reinstatement is no longer possible, as in this case, separation pay is awarded to the employee. The award of separation pay is in lieu of reinstatement and not of backwages. In other words, an illegally dismissed employee is entitled to (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and (2) backwages. Payment of backwages is specifically designed to restore an employee's income that was lost because of his unjust dismissal. On the other hand, payment of separation pay is intended to provide the employee money during the period in which he will be looking for another employment. The petition was partly GRANTED and the Resolution of National Labor Relations Commission dated March 16, 1994 was MODIFIED, that the award of separation pay against the petitioners shall be reckoned from the date private respondent was re-employed by the petitioners in 1982, until June 8, 1991. In addition to separation pay, full backwages are likewise awarded to private respondent, inclusive of allowances, and other benefits or their monetary equivalent pursuant to Article 279 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, computed from the time he was dismissed on June 8, 1991 up to the finality of this decision, without deducting therefrom the earnings derived by private respondent elsewhere during the period of his illegal dismissal.

4. Buiser vs. Leogardo FACTS: Iluminada Ver Buiser, Ma. Cecilia Rilloacuña, and Ma. Mercedes P. Intengan all entered into an eighteen month probationary contract of employment with General Telephone Directory Company (GTPD), a business concerned with telephone directories, as sales representative charged with soliciting advertisements to include in the telephone directories. All respondents were terminated after the period for failing to meet their sales quotas. Though they appealed to the Ministry of Labor of and Employment, they were both dismissed by the regional director and Deputy Minister Leogardo, and ruled that they have not attained regular status, the stipulated probationary period was justified and valid, and that the termination was valid because they have not reached their required sales

quotas. Petitioners contend that Leogardo committed a grave abuse of discretion in rendering the decision in favor of Mariwasa and that, by law, probationary period cannot exceed 6 months, meaning that the probationary period of GTPD was illegal. Hence this petition. ISSUE: Whether or not the stipulated eighteen month probationary period is violative of the Labor Code. DECISION: The decision was rendered in favor of GTPD. According to the Labor Code, while the 6 month general rule on probationary period is stated, it still allows parties to stipulate the terms of the employment provided that they can come into agreement. Given that parties signed and agreed that the 18 month period is the law between them, petitioners cannot impugn this by partially implying the provision of the Labor Code in their favor. Additionally, the grounds for their dismissal was just because it was proven that they did, in fact fail to meet their sales quotas. Hence, this petition is dismissed.


159343 CASERES

September and


28, PAEL,

2007 Petitioners,


FACTS: Universal Robina Sugar Milling Corporation (respondent) is a corporation engaged in the cane sugar milling business. Petitioners were employees. At the start of their respective employments, they were made to sign a Contract of Employment for Specific Project or Undertaking. Petitioners’ contracts were renewed from time to time, until May 1999 when they were informed that their contracts will not be renewed anymore. Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay, 13th month pay, damages and attorney’s fees. LABOR ARBITER: They were not regular employees NLRC and CA: affirmed ISSUE: WON they are regular employees HELD: They are NOT regular employees ART. 280. Regular and Casual Employees. – The provision of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in

which he is employed and his employment shall continue while such actually exists. The principal test for determining whether an employee is a project employee or a regular employee is whether the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. The very nature of the terms and conditions of complainants’ hiring reveals that they were required to perform phases of special projects for a definite period after, their services are available to other farm owners. This is so because the planting of sugar does not entail a whole year operation, and utility works are comparatively small during the off-milling season. It must be noted that there were intervals in petitioners’ respective employment contracts, and that their work depended on the availability of such contracts or projects. Consequently, the employment of URSUMCO’s work force was not permanent but co-terminous with the projects to which the employees were assigned and from whose payrolls they were paid The fact that petitioners were constantly re-hired does not ipso facto establish that they became regular employees. Their respective contracts with respondent show that there were intervals in their employment. In petitioner Caseres’s case, while his employment lasted from August 1989 to May 1999, the duration of his employment ranged from one day to several months at a time, and such successive employments were not continuous. With regard to petitioner Pael, his employment never lasted for more than a

month at a time. These support the conclusion that they were indeed project employees, and since their work depended on the availability of such contracts or projects, necessarily the employment of respondent’s work force was not permanent but co-terminous with the projects to which they were assigned and from whose payrolls they were paid. Moreover, even if petitioners were repeatedly and successively re-hired, still it did not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee. Further, the proviso in Article 280, stating that an employee who has rendered service for at least one (1) year shall be considered a regular employee, pertains to casual employees and not to project employees. 6. Cocomangas Hotel Beach Resort v Visca (Austria-Martinez, 2008) Facts: Visca et al (respondents) alleged that they were regular employees of Cocomangas Hotel (petitioner) and tasked with the maintenance and repair of resort facilities. They were informed by the Front Desk Officer that repair has been suspended because it caused irritation to the resort’s guests. As instructed, Visca et al did not report for work. Later, they found out that the suspension was due to budgetary constraints and that 4 new workers were hired to do their job. Complaints for illegal dismissal were filed. The LA found that Visca was an independent contractor and the other respondents were hired by him. Also, there was no illegal dismissal but only completion of projects because they were project employees. NLRC set aside the decision and held that they were regular employees; hence, illegally dismissed. It took into account 1) quarterly SSS reports, 2) that all were certified and commended by owner-manager for satisfactory performance, 3) thwy were paid holiday and overtime pay, and 4) they were employed continuously for 12 years and paid daily wages. On MR, NLRC reversed itself and held that Visca et al were project employees. CA reinstated the original NLRC decision and found that Visca et al were regular employees because the Hotel failed to set specific periods when

the employment relationship would be terminated; and the repeated hiring rendered them necessary and desirable to the business. Issue: Whether respondents are regular or project employees? The respondents are regular employees. Ruling: Cocomangas changed its theory on appeal Before the LA, Cocomangas classified Visca as an independent contractor and other as the latter’s employees; while in the MR, it treated all respondents as project employees. Further, Cocomangas advanced the absence of an ER-EE relationship before the LA; but invoked the termination of the period of ER-EE relationship in their MR. NLRC should not have considered the new thoery. When a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. Respondents are not project employees A project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonalin nature and the employment is for the duration of the season. Before a project employee can be dismissed, a report must be made to the nearest employment office of the termination of the services of the workers every time he completes a project. In this case, Visca et al worked continuously from 3-12 years without any mention of a “project” to which they were specifically assigned. There is also no evidence of the project employment contracts covering the alleged periods of employment nor the termination of such project employment. Lastly, Cocomangas failed to file termination reports, which is an indication that Visca et al were not project employees but regular employees. The respondents were continuously rehired by Cocomangas An employment ceases to be coterminous with specific projects when the employee is continuously rehired due to the demands of employer’s business and re-engaged for many more projects without interruption. The repeated and continuing need for respondents’ services is sufficient evidence of the necessity, if not indispensability, of their services to Cocomangas’ resort business. CA decision affirmed with modification that the award for backwages should be computed from the time compensation was withheld up to the time of actual reinstatement

7. D.M. Consunji v. Jamin G.R. No. 192514:




D.M. CONSUNJI, INC. and/or DAVID M. CONSUNJI, Petitioners, v. ESTELITO L. JAMIN, Respondent. BRION,J.: FACTS: Petitioner D.M. Consunji, Inc. (DMCI), a construction company, hired respondent Estelito L. Jamin as a laborer. Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamins employment contract had been renewed a number of times. On March 20, 1999, his work at DMCI was terminated due to the completion of the SM Manila project. This termination marked the end of his employment with DMCI as he was not rehired again. Jamin filed a complaintfor illegal dismissal, with several money claims (including attorneys fees), against DMCI and its President/General Manager, David M. Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized cause at a time when he was already 55 years old and had no independent source of livelihood. He claimed that he rendered service to DMCI continuously for almost 31 years. DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from the start of his engagement in 1968 until the completion of its SM Manila project on March 20, 1999 where Jamin last worked. With the completion of the project, it terminated Jamins employment. The LA dismissed the complaint for lack of merit. On appeal, the NLRC affirmed the decision of the LA. On further appeal, the CA reversed the NLRC decision and ruled that Jamin was a regular employee. Hence, DMCI seeks a reversal of the CA rulings on the ground that the appellate court committed a grave error in annulling the decisions of the labor arbiter and the NLRC.







Jamin CA





employee Affirmed.

Labor Law

Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. While the contracts indeed show that Jamin had been engaged as a project employee, there was an almost unbroken string of Jamins rehiring from December 17, 1968 up to the termination of his employment on March 20, 1999. While the history of Jamins employment (schedule of projects) relied upon by DMCI shows a gap of almost four years in his employment for the period between July 28, 1980 (the supposed completion date of the Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV project), the gap was caused by the companys omission of the three projects above mentioned. To reiterate, Jamins employment history with DMCI stands out for his continuous, repeated and successive rehiring in the companys construction projects. In all the 38 projects where DMCI engaged Jamins services, the tasks he performed as a carpenter were indisputably necessary and desirable in DMCIs construction business. He might not have been a member of a work pool as DMCI insisted that it does not maintain a work pool, but his continuous rehiring and the nature of his work unmistakably made him a regular employee. Further, as we stressed in Liganza, respondent capitalizes on our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the rule that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee." "Surely, length of time is not the controlling test for project employment.

Nevertheless, it is vital in determining if the employee was hired fora specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business.Without doubt, Jamins case fits squarely into the employment situation just quoted. PETITION DENIED



FACTS: In the course of a labor dispute between the petitioner and respondent union, the union members were not given work for more than one month. In protest, complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement. A conciliation meeting was conducted wherein Luisa Rombo, Ramona Rombo, Bobong Abrega, and Boboy Silva were not considered by the company as employees, and thus may not be members of the union. It was also agreed that a number of other employees will be reinstated. When respondents again reneged on its commitment, complainants filed the present complaint. It is alleged by the petitioners that the above employees are mere seasonal employees.

ISSUE: Whether or not the seasonal employees have become regular employees.

HELD: The SC held that for respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. The evidence proves the existence of the first, but not of the second, condition. The fact that respondents -- with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva -repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is applicable.

The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists.

Petition is denied.


Hanjin Heavy Industries and & Construction Company terminated the services of Ibanez and four other employees (2002)






Ibanez et al states that they have been employees of Hanjin and have worked on the projects of Hanjin including the North Harbor project (1992-1994), Manila International Port (1994-1996) and Batangas Port (1996- 1998) and projects currently being completed including the La Mesa Dam project Hanjin claims that such employees cannot claim illegal dismissal for the ff reasons: o They are project employees whose employment is co-terminus with the project (LRT project).  They stated that this was expressly written in their contract but Hanjin produced such copies for the labor arbiter o They have signed quitclaims which bars them from filing action or claiming other receivables due to them because they have already received it as per their quitclaim Labor arbiter ruled in favour of Ibanez et al, ruling that there is an illegal dismissal and that Hanjin is liable to pay backwages and damages, stating that they are regular employees and not project employees NLRC reversed Labor Arbiter’s decision. CA reversed NLRC decision stating that Hanjin is liable. On NLRC, Hanjin changed its argument stting that they did not need any further contract to state that their employees were project employees given that the nature of the work is construction. Hanjin also states that while there was no project-based contract, they complied with all the requirements of law and DOLE for project-based employees.

ISSUE: WoN Ibanez et al are regular employees or project employees WoN the quitclaim they signed bar them from any legal remedies or collection of any other receivables from their previous employers RULING: -

ON EMPLOYMENT: The principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees" is whether or not the project employees were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project.



In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a project-toproject basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. o Petitioners did not present other Termination Reports apart from that filed on 11 April 2002. The failure of an employer to file a Termination Report with the DOLE every time a project or a phase thereof is completed indicates that respondents were not project employees o If respondents were actually project employees, petitioners should have filed as many Termination Reports as there were construction projects actually finished and for which respondents were employed. Basically, Hanjin failed to prove their contentions because: o They were not able to submit the actual contract o They were not able to establish that they were sending termination reports to DOLE everytime a Project is completed o They were not able to submit other documents or evidences which states their compliance with project-based employment (project completion bonus etc). The payroll records they show simply state that they paid the project employees a “bonus” but bears no connection to the completion of the project. o The sum of this points to the fact that Ibanez et al were not project employees. ON QUITCLAIM: o Finally, the Quitclaims which the respondents signed cannot bar them from demanding what is legally due them as regular employees. As a rule, quitclaims and waivers or releases are looked upon with disfavor and frowned upon as contrary to public policy. They are thus ineffective to bar claims for the full measure of a worker's legal rights, particularly when the following conditions are applicable:  1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or  (2) where the terms of settlement are unconscionable on their face. To determine whether the Quitclaims signed by respondents are valid, one important factor that must be taken into account is the consideration accepted by respondents; the amount must constitute a

reasonable settlement equivalent to the full measure of their legal rights. In this case, the Quitclaims signed by the respondents do not appear to have been made for valuable consideration. Respondents, who are regular employees, are entitled to backwages and separation pay and, therefore, the Quitclaims which they signed cannot prevent them from seeking claims to which they are entitled.


11. MARIWASA vs. LEOGARDO Posted: May 1, 2015 in case digests, labor relations Tags: case digests, LABOR RELATIONS, MARIWASA vs. LEOGARDO 0 G.R. No. 74246 January 26, 1989

MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners, vs. HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment judgment, and JOAQUIN A. DEQUILA, respondents.


Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a general utility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactory and had failed to meet the required standards. To give him another chance, and with Dequila’s written consent, Mariwasa extended Dequila’s probationary period for another three months: from July 10 to October 9, 1979. Dequila’s performance, however, did not improve and Mariwasa terminated his employment at the end of the extended period.

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Angel T. Dazo, and violation of Presidential Decrees Nos. 928 and 1389.

DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus, Dequila appeals to the Minister of Labor.

MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular employee at the time of his dismissal, thus, he was illegally dismissed. (Initial order: Reinstatement with full backwages. Later amended to direct payment of Dequila’s backwages from the date of his dismissal to December 20, 1982 only.)

ISSUE: WON employer and employee may, by agreement, extend the probationary period of employment beyond the six months prescribed in Art. 282 of the Labor Code?

RULING: YES, agreements stipulating longer probationary periods may constitute lawful exceptions to the statutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is when the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work such as

selling, or when the job requires certain qualifications, skills experience or training.”

In this case, the extension given to Dequila could not have been prearranged to avoid the legal consequences of a probationary period satisfactorily completed. In fact, it was ex gratia, an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said employer’s account to compel it to keep on its payroll one who could not perform according to its work standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension. By reasonably extending the period of probation, the questioned agreement actually improved the probationary employee’s prospects of demonstrating his fitness for regular employment.

Petition granted. Order of Deputy Minister Leogardo reversed.

12. Millares vs. NLRC Significance of the Case In this landmark case, the Supreme Court, citing Brent case and Coyoca case, ruled that seafarers are considered contractual employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time.

Facts Douglas Millares was employed by ESSO International through its local manning agency, Trans-Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied until he opted to retire in 1989. In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more than twenty years of continuous service. Esso International denied Millares’ request for optional retirement on the following grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for retirement before the age of sixty years; and (3) he did not comply with the requirement for claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention to terminate his employment within thirty days from his last disembarkation date. Subsequently, after failing to return to work after the expiration of his leave of absence, Millares was dropped from the roster of crew members effective September 1, 1989. On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969. He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE expired in 1989. In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement plan in view of his twenty years continuous service in the company. Trans-global similarly denied Lagda’s request for availment of the optional early retirement scheme on the same grounds upon which Millares request was denied. Unable to return for contractual sea service after his leave of absence expire, Lagda was also dropped from the roster of crew members effective September 1, 1989.

Millares and Lagda filed a complaint-affidavit for illegal dismissal and nonpayment of employee benefits against private respondents Esso International and Trans-Global before the POEA. The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC affirmed the decision of the POEA dismissing the complaint. NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not covered by the term “regular employment” as defined under Article 280 of the Labor Code. The POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment to fair and equitable recruitment and employment practices and to ensure their welfare, prescribes a standard employment contract for seamen on board ocean-going vessels for a fixed period but in no case to exceed twelve months. Issue Whether or not seafarers are considered regular employees under Article 280 of the Labor Code. Ruling It is for the mutual interest of both the seafarer and the employer why the employment status must be contractual only or for a certain period of time. Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court ruled that seafarers are considered contractual employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. As ruled in Brent case, there are certain forms of employment which also require the performance of usual and desirable functions and which exceed one year but do not necessarily attain regular employment status under

Article 280. Overseas workers including seafarers fall under this type of employment which are governed by the mutual agreements of the parties. And as stated in the Coyoca case, Filipino seamen are governed by the Rules and Regulations of the POEA. The Standard Employment Contract governing the employment of All Filipino seamen on Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. And in no case should the contract of seamen be longer than 12 months. Moreover, the Court held that it is an accepted maritime industry practice that employment of seafarers are for a fixed period only. Constrained by the nature of their employment which is quite peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why the employment status must be contractual only or for a certain period of time. Seafarers spend most of their time at sea and understandably, they can not stay for a long and an indefinite period of time at sea. Limited access to shore society during the employment will have an adverse impact on the seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that necessitates the limitation of its period.

13. Mylene Carvajal vs. Luzon Development Bank and/or Oscar Ramirez G.R. No. 186169

01 August 2012

FACTS: Carvajal was employed as a trainee-teller by Luzon Development Bank (Bank) under a six-month probationary employment contract. Ramirez is the President and CEO of the Bank. A month into her employment, she was send a Memorandum directing her to explain in writing why she should not be subjected to disciplinary action for her eight tardiness on November 2003. A second Memorandum was sent to her on January for her again chronic tardiness on December 2003. She submitted her written explanations for both events and manifested her acceptance of the consequences of her actions. She was terminated for three days effective 21 January 2004. However, on 22 January, her termination was lifted but at the same time, her

services were terminated. In the respondents’ position paper to the LA, they explained that the reasons for her absence are chronic tardiness, absenteeism and failure to perform satisfactorily as a probationary employee.

LA Decision: The petitioner was illegally dismissed because she was not afforded the notice in writing informing her of what the Bank would like to bring out to her for the latter to answer in writing.

NLRC Decision: NLRC affirmed the decision of the LA.

CA Decision: The CA found that the petitioner was not entitled to backwages because she was rightfully dismissed for failure to meet the employment standards.

ISSUE: Whether the petitioner can be considered a regular employee at the time of her dismissal. HELD: No. Carvajal’s appointment letter reads that “Possible extension of this contract will depend on the job requirements of the Bank and your overall performance. Performance review will be conducted before possible renewal can take effect.” Therefore, petitioner knew, at the time of her engagement, that she must comply with the standards set forth by respondent and perform satisfactorily in order to attain regular status. Even the NLRC upheld the petitoner’s probationary status, stating that reinstatement is not synonymous to regularization.

Although probationary employees also enjoy security of tenure, he may still be terminated because of just and authorized causes of termination and the additional ground under Article 281 of the Labor Code, i.e. the probationary employee may also be terminated for failure to qualify as a regular employee

in accordance to the reasonable standards set by the employer. Punctuality is a reasonable standard imposed on every employee, whether in government or private sector. This, together with absenteeism, underperformance and mistake in clearing a check are infractions that cannot be tantamount to satisfactory standards.

In addition to the abovementioned, it has been previously held in PDI vs. Magtibay, Jr., that the second requirement under Article 281 does not require notice and hearing. Due process of law for this second ground consists of making the reasonable standards expected of the employee during his probationary period known to him at the time of his engagement. By the very nature of probationary employment, the employee knows from the very start that he will be under close observation and continuous scrutiny by his supervisors. If termination is for cause, it may be done at anytime during the probation 14. G.R. No. 149329, July 12, 2004 Pangilinan vs. General Milling Facts: General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and poultry and is likewise the distributor of dressed chicken to various restaurants and establishments nationwide. It employs hundreds of employees, some on a regular basis and others on a casual basis, as “emergency workers”. Petitioners in this case were employed by GMC on different dates as emergency workers under separate “temporary/casual contracts of employment” for a period of five months. Upon the expiration of their respective contracts, their services were terminated. They later filed separate complaints for illegal dismissal and non-payment of particular fees. Petitioners allege that there work as chicken dressers was necessary and desirable in the usual business of GMC. They stressed that based on the nature of their work, they were regular employees of the respondent, and therefore they could not be dismissed from their employment unless for just case and after due notice. They made further assertions that GMC terminated their contract of employment without just cause and due notice and that GMC could not rely on the nomenclature of their employment as “temporary casual”. The Labor Arbiter ruled in favour of the petitioners, holding that they were regular employees and that they were illegally dismissed. Upon appeal to the NLRC, the latter reversed the decision of the Labor Arbiter and held that the petitioner, who were temporary or contractual employees were legally terminated upon the expiration of their respective contracts, citing the case of Brent School, Inc. vs Zamora where it was held that while petitioners’ work was necessary and desirable in the usual business of GMC, they cannot beconsidered as regular employees for

having agreed to a fixed term. The Court of Appeals affirmed the decision of the NLRC. Issue: WON the petitioners were regular employees of GMC when their employment was terminated? Held: No. The petitioners were employees with a fixed period, and, as such, were not regular employees. There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the 15 employer; and (2) if the employee has been performing the job for at least a year. In the case of St. Theresa’s School of Novaliches Foundation vs NLRC, it was held that Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. Records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by the petitioners without force, duress or improper pressure, or any circumstances that vitiated their consent. While the petitioners’ employment as chicken dressers is necessary and desirable in the usual business of the respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular employees, but are merely “contractual employees”. Consequently, there was no illegal dismissal when their services were terminated. Lack of notice of termination is of no consequence, because the it was specified in the contract when it shall expire.


16. PINES CITY EDUCAT IONAL CENT ER VS NLRC [GR. NO. 96779, NOVEMBER 10, 1993 Facts: Private respondents were all employed as teachers on probationary basis by petitioner Pines City Educational Center, represented in this proceedings by its President, Eugenio Baltao. With the exception of Jane Bentrez who was hired as a grade school teacher, the remaining private respondents were hired as college instructors. All the private respondents, except Pic art and Chan, signed contracts of employment with petitioner for a fixed duration. On March 31, 1989, due to the expiration of private respondents'contracts

and their poor performance as teachers, they were notified of petitioners'decision not to renew their contracts anymore. Private respondents filed a complaint for illegal dismissal beforethe Labor Arbiter, alleging that their dismissals were without cause and in violation of due process. Except for private respondent Leila Dominguez who worked with petitioners for one semester, all other privateer spondents were employed for one to two years. They were never informed in writing by petitioners regarding the standards or criteria of evaluation so as to enable them to meet the requirements for appointment as regular employees. They were merely notified in writing by petitioners, through its chancellor, Dra. Nimia R. Concepcion, of the termination of their respectiveservices as on March 31, 1989, on account oftheir below-par performance as teachers. Petitioners contended that privateer pondents'separation from employment, apart from their poor performance, was due to the expiration ofthe periods stipulated in their respective contracts. In the case of private respondent Dangwa Bentrez, the duration ofhis employment contract was for one year, or beginning June,1988 to March 1989 whereas in the case ofthe other private respondents, the duration oftheir employment contracts was for one semester,or beginning November, 1988 to March 1989. These stipulations werethe laws that governed theirrelationships, and there was nothing in said contracts which was contrary to law, morals, good customs and public policy. They argued further that they cannot be compelledo enter into new contracts with private respondents. They concluded that the separation of private respondents from the service was justified. Labor Arbiter’s decision: the LaborArbiter rendered judgment in favor of private respondents, On appeal to the National Labor Relations Commission, the latteraffirmed in toto in its resolution dated November 29, 1990,with the additional reasoning that "the stipulation in the contract providing for a definite period in the employmentofcomplainantis obviously null and void, as such stipulation directly assails the safeguards laid down in Article280 (ofthe Labor Code), which explicitly abhors the consideration ofwritten or oral agreements pertaining to definite period in regular employments. Hence, the present petition for certiorari with prayer for the issuance ofa temporary restraining order.



Ruling: In the present case, however, We have to make a distinction. Insofar as the private respondents who knowingly and voluntarily agreed upon fixed periods of employment are concerned, their services were lawfully terminated by reason ofthe expiration of the periods of their respective contracts. These are Dangwa Bentrez, Apollo Ribaya, Sr., Ruperta Ribaya, VirginiaBoado, Cecilia Emocling,Jose Bentrez, Leila Dominguez and Rose Ann Bermudez. Thus, public respondent committed grave abuse of discretion in affirming the decision of the Labor Arbiter ordering the reinstatement and payment of full backwages and other benefits and privileges. With respect to private respondents Roland Picart and Lucia Chan, both of whom did not sign any contractfixing the periods of their employment nor to have knowingly and voluntarily agreed upon fixed periods of employment, petitioners had the burden of proving that the termination of their services was legal. As probationary employees, they are likewise protected by the security of tenure provision of the Constitution. Consequently, they cannot be removed from their positions unless for cause. We concur with these factual findings, there being no showing that they were resolved arbitrarily. Thus, the order for their reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement is proper, conformably with Article 27 9 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, which took effect on March 21, 1989. It should be noted that private respondents RolandPicart and Lucia Chan were dismissed illegally on March 31, 1989, or after the effectivity of said amendatory law. However, in ascertaining the total amount of backwages payable to them, we go back to the rule prior to the mercury drug rule that the total amount derived from employment elsewhere by the employee from the date of dismissal up to the date of reinstatement, ifany, should be deducted therefrom. We restate the underlying reason that employees should not be permitted to enrich themselves at the expense of their employer. In addition, the law abhors double compensation. 19 to this extent, our ruling in Alex Ferrer, et al., v. NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, is hereby modified. Fallo: WHEREFORE, the resolution ofpublic respondent National Labor RelationsCommission dated November 29, 1990 is hereby MODIFIED. privaterespondents Roland Picart and Lucia Chan are ordered reinstated withoutloss of seniority rights and

other privileges and their backwages paid in full inclusive ofallowances, and to their otherbenefits or their monetary equivalent pursuant to Article 279 ofthe Labor Code, as amended by Section 34 ofRepublic ActNo. 67 15, subject to deduction ofincomeearned elsewhere during the period ofdismissal, ifany, to be computed from the time they were dismissed up to the time oftheir actual reinstatement. the rest ofthe Labor Arbiter's decision dat ed February 28, 1990, as affirmed by the NLRCis set aside. The temporary restraining order issued on March 11,1991 is made permanent.

17. Price v. Innodata Phils., Inc. Facts: Innodata Philippines Inc. was a domestic corporation engaged in the data encoding and data conversion business. Cherry Price, Stephanie Domingo, and Lolita Arbilera (petitioners) were employed as formatters by Innodata. They entered into a contract denominated as a “Contract of Employment for a Fixed Period” stipulating that the contract shall be for a period of one year (February 16, 1999 to February 16, 2000). During their employment, petitioners were assigned to handle jobs for various clients of Innodata and once they finished the job for one client, they were immediately assigned to do a new job for another client. On February 16, 2009, the Human Resource Manager of Innodata wrote to petitioners informing them of their last day of work (February 16, 2000). According to Innodata, this was due to the end of their contract. Petitioners then filed a complaint for illegal dismissal claiming that they should be considered regular employees since their positions as formatters were necessary and desirable to the usual business of Innodata as an encoding, conversion and data processing company. They also invoked the decisions in Villanueva v. NLRC and Servidad v. NLRC in which the Court already purportedly ruled that “the nature if employment at Innodata is regular.” They were also neither considered project employees since their employment was not coterminous with any project or undertaking. On the other hand, respondents contended that Innodata was engaged in the business of data processing, type-setting, indexing and abstracting for its

foreign clients and the bulk of the work was data processing, which involved data encoding, which half of its employees did. Due to the wide range of services, Innodata was constrained to hire new employees for a fixed period not more than one year like the petitioners whose contracts of employment were for a limited period only. Moreover, they claimed that the petitioners were estopped since they entered into the contracts knowingly and voluntarily. The Labor Arbiter held that as formatters, petitioners occupied jobs that were necessary, desirable and indispensable to the data processing and encoding business and should be considered regular employees who were entitled to security of tenure. NLRC, on appeal, reversed finding that petitioners were not regular employees but fixed-term employees as stipulated in their contracts. CA affirmed the NLRC ruling. Issue: Whether or not petitioners were illegally dismissed - YES Held/Ratio: This issue is ultimately dependent on the question of whether petitioners were hired by Innodata under valid fixed-term employment contracts. The Court found that there were no valid fixed-term employment contracts, and petitioners were regular employees of Innodata who could not dismiss them except for just or authorized cause. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Based on Art. 280, the following employees are accorded regular status: (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer, regardless of the length of their employment; and (2) those who were initially hired as casual employees, but have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. Petitioners belong to the first type. The applicable test to determine whether an employment ntracts themselves state that the petitioners were employed on February 17, 1999. However, respondents asserted before the Labor Arbiter that the contracts were effective only on September 6, 1999. While they submitted employment contracts with September 6, 1999 as beginning of date of effectivity, in one of them, the original date, February 16, 1999,w as merely crossed out and replaced with September 6. The alterations were very obvious and have not initialed by the petitioners to indicate their assent to the same. If the contracts were truly fixed-term contracts, then a change in the term or period agreed upon is material and would already constitute a novation of the original contract. Innodata further contends that petitioners were project employees whose employment ceased at the end of the specific project or undertaking. This is devoid of merit. In Philex Mining Corp v. NLRC, “project employees” are those hired: (1) for a specific project or undertaking, andwherein (2) the completion or termination of such project has been

determined at the time of the engagement of the employee. The employment contracts did not mention what specific project or undertaking petitioners were hired for. The conclusion by the Court of Appeals that petitioners were hired for the Earthweb project is not supported by any evidence on record. More importantly, there is also a dearth of evidence that such project or undertaking had already been completed or terminated to justify the dismissal of petitioners. In fact, petitioners did not work on just one project, but continuously worked for a series of projects for various clients. Petitioners, being regular employees, are entitled to security of tenure.

18. Purefoods Corporation vs. NLRC, et. Al December 12, 1997

G.R. No. 122653


The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After the expiration of their respective contracts of employment in June and July 1991, their services were terminated. They forthwith executed a “Release and Quitclaim” stating that they had no claim whatsoever against the petitioner. On December 1992, Private respondents filed before the NLRC a complaint for illegal dismissal against the petitioner and its plant manager, Marciano Aganon.

The Labor Arbiter dismissed the complaint on the ground that the private respondents were mere contractual workers, and not regular employees; hence, they could not avail of the law on security of tenure. The private respondents appealed from the decision to the NLRC which affirmed the Labor Arbiter's decision. On private respondents’ motion for reconsideration, the NLRC rendered another decision on 30 January 1995 vacating and setting aside its earlier decision and held that the private respondents and their co-complainants were

regular employees. It declared that the contract of employment for five months was a “clandestine scheme employed by [the petitioner] to stifle [private respondents’] right to security of tenure” and should therefore be struck down and disregarded for being contrary to law, public policy, and morals. Hence, their dismissal on account of the expiration of their respective contracts was illegal.

Petitioner’s motion for reconsideration was denied; hence, this appeal. Petitioner’s submission before the Court: the private respondents are now estopped from questioning their separation from petitioner’s employ in view of their express conformity with the five-month duration of their employment contracts. In the instant case, the private respondents were employed for a period of five months only. In any event, private respondents' prayer for reinstatement is well within the purview of the “Release and Quitclaim” they had executed wherein they unconditionally released the petitioner from any and all other claims which might have arisen from their past employment with the petitioner.

ISSUE: Whether or not the 5-month period specified in private respondents’ employment contract is invalid and is therefore violative of their constitutional right to security of tenure.

Ruling: The five-month period specified in private respondents’ employment contract is invalid. In the leading case of Brent School, Inc. v. Zamora, although the Court has upheld the legality of fixed-term employment, the Court also held that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and morals. Brent also laid down the criteria under which term employment cannot be said to be in circumvention of the law on security of tenure: 1) The fixed period of employment was knowingly and

voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

None of these criteria had been met in the present case. It could not be supposed that private respondents and all other so-called “casual” workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5month employment contract. The petitioner does not deny or rebut private respondents' averments (1) that the main bulk of its workforce consisted of its so-called “casual” employees; (2) that as of July 1991, “casual” workers numbered 1,835; and regular employees, 263; (3) that the company hired “casual” every month for the duration of five months, after which their services were terminated and they were replaced by other “casual” employees on the same fivemonth duration; and (4) that these “casual” employees were actually doing work that were necessary and desirable in petitioner’s usual business. This scheme of the petitioner was apparently designed to prevent the private respondents and the other “casual” employees from attaining the status of a regular employee. It was a clear circumvention of the employees’ right to security of tenure and to other benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in evading the application of labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating employees by the simple expedient of refusing to renew the employment contracts. The five-month period specified in private respondents’ employment contracts having been imposed precisely to circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or morals. To uphold the contractual arrangement between the petitioner and the private respondents would, in effect, permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the employees’ security of tenure in their jobs.

The NLRC was correct in finding that the private respondents were regular employees and that they were illegally dismissed from their jobs. Under Article 279 of the Labor Code and the recent jurisprudence, the legal consequence of illegal dismissal is reinstatement without loss of seniority rights and other privileges, with full back wages computed from the time of dismissal up to the time of actual reinstatement, without deducting the earnings derived elsewhere pending the resolution of the case. However, since reinstatement is no longer possible because the petitioner's tuna cannery plant had, admittedly, been closed in November 1994, the proper award is separation pay equivalent to one month pay or one-half month pay for every year of service, whichever is higher, to be computed from the commencement of their employment up to the closure of the tuna cannery plant. The amount of back wages must be computed from the time the private respondents were dismissed until the time petitioner's cannery plant ceased operation.

Decision: WHEREFORE, for lack of merit, the instant petition is DISMISSED and the challenged decision of 30 January 1995 of the National Labor Relations Commission in NLRC CA No. M-001323-93 is hereby AFFIRMED subject to the above modification on the computation of the separation pay and back wages.

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